N-Q 1 n-qfutpe113015_sec.htm n-qfutpe113015_sec.htm - Generated by SEC Publisher for SEC Filing

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

 

FORM N-Q

 

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF

REGISTERED MANAGEMENT INVESTMENT COMPANY

 

 

Investment Company Act file number 811-05569

 

Franklin Universal Trust

(Exact name of registrant as specified in charter)

 

One Franklin Parkway, San Mateo, CA  94403-1906

(Address of principal executive offices) (Zip code)

 

Craig S. Tyle, One Franklin Parkway, San Mateo, CA  94403-1906

(Name and address of agent for service)

 

Registrant's telephone number, including area code: (650) 312-2000

 

Date of fiscal year end: 8/31

 

Date of reporting period: 11/30/15

 

 

Item 1. Schedule of Investments.


 

Franklin Universal Trust        
 
Statement of Investments, November 30, 2015 (unaudited)      
 
 
  Country Shares   Value
Common Stocks 46.2%        
Energy 1.4%        
Spectra Energy Corp. United States 92,350 $ 2,419,570
Materials 0.8%        
BHP Billiton PLC, ADR Australia 25,185   610,736
Freeport-McMoRan Inc., B United States 80,380   657,509
aSouth32 Ltd., ADR Australia 10,074   42,512
        1,310,757
Transportation 0.1%        
aCEVA Holdings LLC United Kingdom 179   92,407
Utilities 43.9%        
Alliant Energy Corp. United States 40,000   2,407,600
American Electric Power Co. Inc. United States 75,000   4,200,750
CenterPoint Energy Inc. United States 169,800   2,878,110
CMS Energy Corp. United States 65,000   2,276,300
Consolidated Edison Inc. United States 42,000   2,610,300
Dominion Resources Inc. United States 100,000   6,737,000
DTE Energy Co. United States 25,000   2,012,250
Duke Energy Corp. United States 80,060   5,424,865
Edison International United States 75,000   4,452,000
Entergy Corp. United States 50,000   3,331,500
Exelon Corp. United States 55,000   1,502,050
FirstEnergy Corp. United States 60,000   1,883,400
Great Plains Energy Inc. United States 70,000   1,889,300
NextEra Energy Inc. United States 50,000   4,993,000
PG&E Corp. United States 50,000   2,636,500
Pinnacle West Capital Corp. United States 70,000   4,435,200
PPL Corp. United States 80,000   2,723,200
Public Service Enterprise Group Inc. United States 45,000   1,759,500
Sempra Energy United States 50,000   4,961,500
The Southern Co. United States 87,250   3,886,115
aTalen Energy Corp. United States 9,992   77,838
UIL Holdings Corp. United States 40,000   2,034,000
WEC Energy Group Inc. United States 40,000   1,972,800
Westar Energy Inc. United States 60,000   2,560,800
Xcel Energy Inc. United States 60,000   2,139,600
        75,785,478
Total Common Stocks (Cost $47,699,704)       79,608,212
Convertible Preferred Stocks 0.1%        
Transportation 0.1%        
aCEVA Holdings LLC, cvt. pfd., A-1 United Kingdom 6   4,200
aCEVA Holdings LLC, cvt. pfd., A-2 United Kingdom 388   200,031
Total Convertible Preferred Stocks (Cost $587,093)       204,231
    Principal Amount*    
Corporate Bonds 86.4%        
Automobiles & Components 1.8%        
Fiat Chrysler Automobiles NV, senior note, 5.25%, 4/15/23 United Kingdom 1,700,000   1,689,375
The Goodyear Tire & Rubber Co., senior note,        
6.50%, 3/01/21 United States 1,100,000   1,165,659
5.125%, 11/15/23 United States 300,000   308,250
        3,163,284
Banks 3.6%        
CIT Group Inc., senior note,        
5.375%, 5/15/20 United States 500,000   528,750
5.00%, 8/15/22 United States 1,200,000   1,228,500
b 144A, 6.625%, 4/01/18 United States 300,000   320,625
cCitigroup Inc., junior sub. bond, M, 6.30% to 5/15/24, FRN thereafter, Perpetual United States 1,100,000   1,083,500

 

Quarterly Statement of Investments | See Notes to Statement of Investments.


 

Franklin Universal Trust      
 
Statement of Investments, November 30, 2015 (unaudited) (continued)    
cJPMorgan Chase & Co., junior sub. bond,      
R, 6.00% to 8/01/23, FRN thereafter, Perpetual United States 900,000 911,700
V, 5.00% to 7/30/19, FRN thereafter, Perpetual United States 800,000 769,000
Royal Bank of Scotland Group PLC, sub. note,      
6.125%, 12/15/22 United Kingdom 900,000 992,250
5.125%, 5/28/24 United Kingdom 400,000 411,750
      6,246,075
Capital Goods 2.3%      
bBombardier Inc., senior bond, 144A, 7.50%, 3/15/25 Canada 1,700,000 1,275,000
Navistar International Corp., senior bond, 8.25%, 11/01/21 United States 800,000 574,000
Oshkosh Corp., senior note, 5.375%, 3/01/22 United States 500,000 507,500
TransDigm Inc.,      
senior sub. bond, 6.50%, 7/15/24 United States 200,000 198,000
b senior sub. bond, 144A, 6.50%, 5/15/25 United States 100,000 98,625
senior sub. note, 6.00%, 7/15/22 United States 700,000 691,250
bZachry Holdings Inc., senior note, 144A, 7.50%, 2/01/20 United States 600,000 603,000
      3,947,375
Commercial & Professional Services 1.0%      
bAcosta Inc., senior note, 144A, 7.75%, 10/01/22 United States 500,000 463,750
IHS Inc., senior note, 5.00%, 11/01/22 United States 300,000 306,375
United Rentals North America Inc., senior bond, 5.75%, 11/15/24 United States 1,000,000 1,015,000
      1,785,125
Consumer Durables & Apparel 3.4%      
bJarden Corp., senior note, 144A, 5.00%, 11/15/23 United States 700,000 721,788
KB Home,      
senior bond, 7.50%, 9/15/22 United States 1,100,000 1,116,500
senior note, 4.75%, 5/15/19 United States 200,000 197,000
senior note, 7.00%, 12/15/21 United States 300,000 300,750
M/I Homes Inc., senior note, 8.625%, 11/15/18 United States 200,000 205,750
bTaylor Morrison Communities Inc./Monarch Communities Inc., senior note, 144A,      
5.25%, 4/15/21 United States 400,000 403,000
5.875%, 4/15/23 United States 500,000 500,000
5.625%, 3/01/24 United States 700,000 679,875
Toll Brothers Finance Corp., senior bond, 5.625%, 1/15/24 United States 700,000 740,250
Visant Corp., senior note, 10.00%, 10/01/17 United States 900,000 924,525
      5,789,438
Consumer Services 5.2%      
b1011778 BC ULC/New Red Finance Inc.,      
secured note, second lien, 144A, 6.00%, 4/01/22 Canada 1,000,000 1,037,500
senior secured note, first lien, 144A, 4.625%, 1/15/22 Canada 500,000 506,250
b24 Hour Holdings III LLC, senior note, 144A, 8.00%, 6/01/22 United States 1,000,000 842,500
dCaesars Entertainment Operating Co. Inc., senior secured note, first lien, 11.25%,      
6/01/17 United States 500,000 387,500
       b,dFontainebleau Las Vegas, senior secured bond, first lien, 144A, 11.00%, 6/15/15 United States 1,600,000 200
bInternational Game Technology PLC, senior secured bond, 144A, 6.50%, 2/15/25 United States 1,700,000 1,569,312
bLandry's Inc., senior note, 144A, 9.375%, 5/01/20 United States 900,000 959,625
MGM Resorts International, senior note,      
6.875%, 4/01/16 United States 1,200,000 1,221,000
7.50%, 6/01/16 United States 800,000 823,000
bSabre GLBL Inc., first lien, 144A, 5.375%, 4/15/23 United States 300,000 301,500
bWynn Las Vegas LLC/Wynn Las Vegas Capital Corp., senior bond, 144A, 5.50%,      
3/01/25 United States 800,000 723,000
bWynn Macau Ltd., senior note, 144A, 5.25%, 10/15/21 Macau 600,000 542,250
      8,913,637
Diversified Financials 4.5%      
AerCap Ireland Capital Ltd./AerCap Global Aviation Trust, senior note,      
4.25%, 7/01/20 Netherlands 800,000 813,000
4.625%, 10/30/20 Netherlands 200,000 205,750
5.00%, 10/01/21 Netherlands 500,000 519,063
Ally Financial Inc., senior note, 5.50%, 2/15/17 United States 600,000 618,750
eDeutsche Bank AG, sub. bond, 4.296% to 5/24/23, FRN thereafter, 5/24/28 Germany 900,000 850,725
E*TRADE Financial Corp., senior note,      
5.375%, 11/15/22 United States 300,000 318,000

 


 

Franklin Universal Trust        
 
Statement of Investments, November 30, 2015 (unaudited) (continued)      
4.625%, 9/15/23 United States 400,000   412,000
Navient Corp., senior note,        
8.45%, 6/15/18 United States 900,000   947,250
5.50%, 1/15/19 United States 800,000   771,600
4.875%, 6/17/19 United States 800,000   750,000
bNeuberger Berman Group LLC/Finance Corp., senior note, 144A, 5.875%, 3/15/22 United States 700,000   732,235
bOneMain Financial Holdings Inc., senior note, 144A, 7.25%, 12/15/21 United States 800,000   816,000
        7,754,373
Energy 12.8%        
BreitBurn Energy Partners LP/BreitBurn Finance Corp.,        
senior bond, 7.875%, 4/15/22 United States 700,000   206,500
senior note, 8.625%, 10/15/20 United States 600,000   219,000
California Resources Corp.,        
senior bond, 6.00%, 11/15/24 United States 600,000   360,375
senior note, 5.50%, 9/15/21 United States 400,000   242,000
bCalumet Specialty Products Partners LP/Calumet Finance Co., senior note, 144A,        
7.75%, 4/15/23 United States 800,000   754,000
CGG SA, senior note,        
6.50%, 6/01/21 France 600,000   328,500
6.875%, 1/15/22 France 300,000   164,813
Chaparral Energy Inc.,        
senior bond, 8.25%, 9/01/21 United States 200,000   44,000
senior bond, 7.625%, 11/15/22 United States 300,000   64,500
senior note, 9.875%, 10/01/20 United States 800,000   220,000
CHC Helicopter SA, senior secured note, first lien, 9.25%, 10/15/20 Canada 1,350,000   654,750
Chesapeake Energy Corp., senior note,        
6.625%, 8/15/20 United States 1,700,000   807,500
4.875%, 4/15/22 United States 300,000   128,438
Clayton Williams Energy Inc., senior note, 7.75%, 4/01/19 United States 500,000   470,000
Compressco Partners LP/Finance Corp., senior note, 7.25%, 8/15/22 United States 300,000   242,812
CONSOL Energy Inc., senior note,        
5.875%, 4/15/22 United States 800,000   528,000
b 144A, 8.00%, 4/01/23 United States 800,000   568,000
bCrestwood Midstream Partners LP/Crestwood Midstream Finance Corp., senior note,        
144A, 6.25%, 4/01/23 United States 500,000   427,500
bDrill Rigs Holdings Inc., secured note, 144A, 6.50%, 10/01/17 United States 1,100,000   767,250
Energy Transfer Equity LP,        
senior bond, 5.875%, 1/15/24 United States 200,000   184,395
senior note, first lien, 7.50%, 10/15/20 United States 1,500,000   1,581,562
Energy XXI Gulf Coast Inc., senior note, 9.25%, 12/15/17 United States 1,300,000   383,500
bEnQuest PLC, senior note, 144A, 7.00%, 4/15/22 United Kingdom 600,000   364,125
EPL Oil & Gas Inc., senior note, 8.25%, 2/15/18 United States 800,000   260,000
bFerrellgas LP/Ferrellgas Finance Corp., senior note, 144A, 6.75%, 6/15/23 United States 900,000   809,820
bGoodrich Petroleum Corp., secured note, second lien, 144A, 8.875%, 3/15/18 United States 600 f 300,000
Halcon Resources Corp.,        
senior note, 9.75%, 7/15/20 United States 800,000   256,000
b senior secured note, third lien, 144A, 13.00%, 2/15/22 United States 520,000   243,100
bLinn Energy LLC/Finance Corp., senior secured note, second lien, 144A, 12.00%,        
12/15/20 United States 900,000   562,500
Martin Midstream Partners LP/Martin Midstream Finance Corp., senior note, 7.25%,        
2/15/21 United States 1,000,000   953,750
Memorial Resource Development Corp., senior note, 5.875%, 7/01/22 United States 500,000   468,750
Midstates Petroleum Co. Inc./LLC, senior note, 9.25%, 6/01/21 United States 700,000   113,750
bMurray Energy Corp., secured note, second lien, 144A, 11.25%, 4/15/21 United States 700,000   159,250
Oasis Petroleum Inc.,        
senior bond, 6.875%, 1/15/23 United States 200,000   173,500
senior note, 7.25%, 2/01/19 United States 200,000   190,500
senior note, 6.50%, 11/01/21 United States 400,000   342,000
senior note, 6.875%, 3/15/22 United States 400,000   343,000
bOcean Rig UDW Inc., senior note, 144A, 7.25%, 4/01/19 United States 400,000   190,000
PBF Holding Co. LLC, first lien, 8.25%, 2/15/20 United States 1,200,000   1,258,500
bPeabody Energy Corp., second lien, 144A, 10.00%, 3/15/22 United States 1,700,000   408,000
Penn Virginia Corp., senior note, 8.50%, 5/01/20 United States 700,000   157,500
QEP Resources Inc., senior bond,        
5.375%, 10/01/22 United States 700,000   633,500

 


 

Franklin Universal Trust      
 
Statement of Investments, November 30, 2015 (unaudited) (continued)    
5.25%, 5/01/23 United States 400,000 359,000
b,d,gQuicksilver Resources Inc., secured note, second lien, 144A, FRN, 7.00%, 6/21/19 United States 400,000 122,000
Sabine Pass Liquefaction LLC, first lien,      
5.625%, 2/01/21 United States 1,000,000 972,500
6.25%, 3/15/22 United States 200,000 194,250
5.625%, 4/15/23 United States 500,000 463,750
Sanchez Energy Corp., senior note,      
7.75%, 6/15/21 United States 900,000 688,500
6.125%, 1/15/23 United States 300,000 207,750
bUltra Petroleum Corp., senior bond, 144A, 6.125%, 10/01/24 United States 1,100,000 418,000
W&T Offshore Inc., senior note, 8.50%, 6/15/19 United States 1,200,000 516,000
WPX Energy Inc., senior note, 8.25%, 8/01/23 United States 600,000 562,500
      22,039,190
Food, Beverage & Tobacco 3.1%      
Constellation Brands Inc.,      
senior bond, 4.75%, 11/15/24 United States 400,000 412,000
senior note, 4.25%, 5/01/23 United States 500,000 505,000
e senior note, 4.75%, 12/01/25 United States 100,000 102,000
Cott Beverages Inc., senior note, 6.75%, 1/01/20 United States 600,000 624,000
bDole Food Co. Inc., senior secured note, 144A, 7.25%, 5/01/19 United States 300,000 300,750
bJBS USA LLC/Finance Inc.,      
senior bond, 144A, 5.875%, 7/15/24 United States 600,000 592,125
senior note, 144A, 8.25%, 2/01/20 United States 300,000 315,750
senior note, 144A, 7.25%, 6/01/21 United States 700,000 733,250
Post Holdings Inc., senior note,      
7.375%, 2/15/22 United States 800,000 835,752
b 144A, 6.75%, 12/01/21 United States 500,000 511,250
b 144A, 6.00%, 12/15/22 United States 300,000 297,000
b 144A, 7.75%, 3/15/24 United States 100,000 104,250
      5,333,127
Health Care Equipment & Services 6.4%      
Alere Inc.,      
senior note, 7.25%, 7/01/18 United States 900,000 933,894
senior sub. note, 6.50%, 6/15/20 United States 100,000 99,500
CHS/Community Health Systems Inc.,      
senior note, 8.00%, 11/15/19 United States 900,000 915,750
senior note, 7.125%, 7/15/20 United States 400,000 402,000
senior note, 6.875%, 2/01/22 United States 200,000 194,500
senior secured note, first lien, 5.125%, 8/15/18 United States 600,000 615,000
DaVita HealthCare Partners Inc.,      
senior bond, 5.125%, 7/15/24 United States 400,000 399,750
senior note, 5.75%, 8/15/22 United States 500,000 520,000
HCA Inc.,      
senior bond, 5.875%, 5/01/23 United States 800,000 830,000
senior bond, 5.875%, 2/15/26 United States 1,400,000 1,422,750
senior note, 6.50%, 2/15/16 United States 1,400,000 1,416,009
senior secured bond, first lien, 5.875%, 3/15/22 United States 600,000 644,250
bHologic Inc., senior note, 144A, 5.25%, 7/15/22 United States 500,000 521,875
Tenet Healthcare Corp., senior note,      
5.00%, 3/01/19 United States 800,000 774,000
5.50%, 3/01/19 United States 400,000 390,000
8.125%, 4/01/22 United States 1,000,000 1,003,750
      11,083,028
Materials 11.8%      
ArcelorMittal, senior note,      
6.50%, 3/01/21 Luxembourg 900,000 789,750
6.125%, 6/01/25 Luxembourg 300,000 237,000
bArdagh Packaging Finance PLC, senior note, 144A, 9.125%, 10/15/20 Luxembourg 500,000 528,125
bArdagh Packaging Finance PLC/Ardagh MP Holdings USA Inc., senior note, 144A,      
6.25%, 1/31/19 Luxembourg 200,000 200,500
7.00%, 11/15/20 Luxembourg 88,235 88,346
6.75%, 1/31/21 Luxembourg 200,000 203,125
6.00%, 6/30/21 Luxembourg 500,000 495,000
bBarminco Finance Pty. Ltd., senior note, 144A, 9.00%, 6/01/18 Australia 800,000 648,400

 


 

Franklin Universal Trust      
 
Statement of Investments, November 30, 2015 (unaudited) (continued)    
bBlue Cube Spinco Inc., senior bond, 144A, 10.00%, 10/15/25 United States 800,000 888,000
bBlueScope Steel Ltd./BlueScope Steel Finance, senior note, 144A, 7.125%, 5/01/18 Australia 1,400,000 1,375,500
bCemex Finance LLC, senior secured note, first lien, 144A, 6.00%, 4/01/24 Mexico 600,000 559,125
bCemex SAB de CV, first lien, 144A, 5.70%, 1/11/25 Mexico 1,100,000 978,312
bThe Chemours Co.,      
senior bond, 144A, 7.00%, 5/15/25 United States 200,000 150,000
senior note, 144A, 6.625%, 5/15/23 United States 1,100,000 830,500
bEldorado Gold Corp., senior note, 144A, 6.125%, 12/15/20 Canada 1,000,000 926,250
bFirst Quantum Minerals Ltd., senior note, 144A,      
6.75%, 2/15/20 Canada 631,000 413,305
7.00%, 2/15/21 Canada 1,131,000 724,547
bFMG Resources (August 2006) Pty. Ltd., senior secured note, 144A, 9.75%, 3/01/22 Australia 1,800,000 1,735,875
bNOVA Chemicals Corp., senior bond, 144A, 5.00%, 5/01/25 Canada 1,100,000 1,080,750
Novelis Inc., senior note, 8.75%, 12/15/20 Canada 700,000 684,250
bOwens-Brockway Glass Container Inc., senior note, 144A,      
5.00%, 1/15/22 United States 600,000 597,000
5.875%, 8/15/23 United States 500,000 520,937
bPlatform Specialty Products Corp., senior note, 144A, 6.50%, 2/01/22 United States 900,000 787,500
bPSPC Escrow II Corp., senior note, 144A, 10.375%, 5/01/21 United States 200,000 204,500
bRain CII Carbon LLC/CII Carbon Corp., second lien, 144A, 8.25%, 1/15/21 United States 500,000 387,500
Reynolds Group Issuer Inc./LLC/SA,      
first lien, 5.75%, 10/15/20 United States 500,000 514,375
senior note, 8.50%, 5/15/18 United States 1,000,000 1,007,500
senior note, 9.00%, 4/15/19 United States 200,000 203,500
senior note, 9.875%, 8/15/19 United States 100,000 103,875
senior note, 8.25%, 2/15/21 United States 700,000 702,625
bSealed Air Corp.,      
senior bond, 144A, 5.50%, 9/15/25 United States 400,000 418,000
senior note, 144A, 6.50%, 12/01/20 United States 400,000 446,000
Steel Dynamics Inc.,      
senior bond, 5.50%, 10/01/24 United States 500,000 478,750
senior note, 5.125%, 10/01/21 United States 400,000 391,000
Verso Paper Holdings LLC/Inc., senior secured note, first lien, 11.75%, 1/15/19 United States 216,000 32,940
      20,332,662
Media 9.4%      
Cablevision Systems Corp., senior note, 8.625%, 9/15/17 United States 700,000 740,250
CCO Holdings LLC/CCO Holdings Capital Corp., senior bond, 5.25%, 9/30/22 United States 1,700,000 1,712,750
bCCOH Safari LLC, senior bond, 144A, 5.75%, 2/15/26 United States 500,000 503,750
Clear Channel Worldwide Holdings Inc.,      
senior note, 6.50%, 11/15/22 United States 500,000 493,750
senior sub. note, 7.625%, 3/15/20 United States 700,000 681,625
CSC Holdings LLC, senior note,      
6.75%, 11/15/21 United States 700,000 663,250
5.25%, 6/01/24 United States 700,000 595,000
DISH DBS Corp., senior note,      
7.125%, 2/01/16 United States 1,000,000 1,009,150
6.75%, 6/01/21 United States 700,000 706,125
Gannett Co. Inc.,      
senior bond, 6.375%, 10/15/23 United States 900,000 954,000
senior note, 5.125%, 7/15/20 United States 800,000 832,000
iHeartCommunications Inc.,      
senior secured bond, first lien, 9.00%, 3/01/21 United States 1,300,000 898,300
senior secured note, first lien, 9.00%, 9/15/22 United States 100,000 68,625
bRadio One Inc., senior sub. note, 144A, 9.25%, 2/15/20 United States 500,000 412,500
bSirius XM Radio Inc., senior bond, 144A,      
6.00%, 7/15/24 United States 800,000 829,000
5.375%, 4/15/25 United States 700,000 694,750
bUnitymedia KabelBW GmbH, senior bond, 144A, 6.125%, 1/15/25 Germany 600,000 607,875
bUnivision Communications Inc., senior secured bond, first lien, 144A, 6.75%, 9/15/22 United States 358,000 372,320
bVirgin Media Finance PLC, senior bond, 144A, 6.375%, 4/15/23 United Kingdom 300,000 307,875
bVirgin Media Secured Finance PLC, senior secured bond,      
144A, 5.25%, 1/15/26 United Kingdom 500,000 490,625
first lien, 144A, 5.50%, 1/15/25 United Kingdom 800,000 806,000
bVTR Finance BV, senior secured note, 144A, 6.875%, 1/15/24 Chile 600,000 582,000

 


 

Franklin Universal Trust      
 
Statement of Investments, November 30, 2015 (unaudited) (continued)    
bWMG Acquisition Corp.,      
secured note, 144A, 6.00%, 1/15/21 United States 1,190,000 1,210,825
senior note, 144A, 5.625%, 4/15/22 United States 100,000 98,250
      16,270,595
Pharmaceuticals, Biotechnology & Life Sciences 2.8%      
bConcordia Healthcare Corp., senior note, 144A, 7.00%, 4/15/23 Canada 1,000,000 865,000
bEndo Finance LLC/Endo Ltd./Endo Finco Inc.,      
senior bond, 144A, 6.00%, 2/01/25 United States 600,000 573,000
senior note, 144A, 6.00%, 7/15/23 United States 400,000 390,500
bHorizon Pharma Financing Inc., senior note, 144A, 6.625%, 5/01/23 United States 800,000 692,000
bJaguar Holding Co. II/Pharmaceutical Product Development LLC, senior note, 144A,      
6.375%, 8/01/23 United States 500,000 481,250
bValeant Pharmaceuticals International, senior note, 144A, 6.375%, 10/15/20 United States 1,100,000 1,013,375
bValeant Pharmaceuticals International Inc.,      
senior bond, 144A, 6.125%, 4/15/25 United States 300,000 261,750
senior note, 144A, 5.625%, 12/01/21 United States 700,000 614,250
      4,891,125
Real Estate 0.9%      
Equinix Inc., senior bond,      
5.375%, 4/01/23 United States 1,300,000 1,330,875
e 5.875%, 1/15/26 United States 200,000 203,500
      1,534,375
Retailing 1.7%      
bAmerican Builders & Contractors Supply Co. Inc., senior note, 144A, 5.625%, 4/15/21 United States 900,000 920,250
bArgos Merger Sub Inc., senior note, 144A, 7.125%, 3/15/23 United States 300,000 303,000
bDollar Tree Inc., senior note, 144A, 5.75%, 3/01/23 United States 500,000 522,500
bNetflix Inc., senior bond, 144A, 5.875%, 2/15/25 United States 1,100,000 1,142,625
      2,888,375
Semiconductors & Semiconductor Equipment 0.5%      
bQorvo Inc., senior bond, 144A, 7.00%, 12/01/25 United States 800,000 824,000
Software & Services 2.9%      
bBMC Software Finance Inc., senior note, 144A, 8.125%, 7/15/21 United States 1,600,000 1,244,000
bFirst Data Corp.,      
second lien, 144A, 5.75%, 1/15/24 United States 1,400,000 1,403,500
senior note, 144A, 7.00%, 12/01/23 United States 400,000 406,500
senior secured bond, second lien, 144A, 8.25%, 1/15/21 United States 900,000 941,625
bInfor (U.S.) Inc., senior note, 144A, 6.50%, 5/15/22 United States 1,100,000 979,000
      4,974,625
Technology Hardware & Equipment 1.5%      
bAlcatel-Lucent USA Inc., senior note, 144A, 6.75%, 11/15/20 France 730,000 775,253
bBlackboard Inc., senior note, 144A, 7.75%, 11/15/19 United States 700,000 626,500
         b,hCommScope Holdings Co. Inc., senior note, 144A, PIK, 6.625%, 6/01/20 United States 400,000 406,500
bCommScope Technologies Finance LLC, senior bond, 144A, 6.00%, 6/15/25 United States 900,000 864,000
      2,672,253
Telecommunication Services 7.0%      
CenturyLink Inc., senior bond,      
6.75%, 12/01/23 United States 300,000 285,945
5.625%, 4/01/25 United States 1,000,000 863,750
bDigicel Group Ltd., senior note, 144A, 8.25%, 9/30/20 Bermuda 900,000 785,812
bDigicel Ltd., senior note, 144A,      
6.00%, 4/15/21 Bermuda 500,000 452,500
6.75%, 3/01/23 Bermuda 300,000 266,411
Intelsat Jackson Holdings SA,      
senior bond, 6.625%, 12/15/22 Luxembourg 500,000 305,000
senior note, 7.25%, 10/15/20 Luxembourg 200,000 168,000
senior note, 7.50%, 4/01/21 Luxembourg 1,500,000 1,252,500
bMillicom International Cellular SA, senior note, 144A, 6.625%, 10/15/21 Luxembourg 900,000 871,312
bSprint Communications Inc., senior note, 144A,      
9.00%, 11/15/18 United States 2,000,000 2,165,000
7.00%, 3/01/20 United States 500,000 511,562
Sprint Corp., senior bond,      
7.875%, 9/15/23 United States 500,000 403,750

 


 

Franklin Universal Trust          
 
Statement of Investments, November 30, 2015 (unaudited) (continued)        
7.125%, 6/15/24 United States 200,000   155,125  
T-Mobile USA Inc.,          
senior bond, 6.50%, 1/15/24 United States 200,000   202,000  
senior bond, 6.375%, 3/01/25 United States 500,000   500,000  
senior note, 6.542%, 4/28/20 United States 800,000   828,000  
senior note, 6.125%, 1/15/22 United States 100,000   102,301  
bWind Acquisition Finance SA,          
senior note, 144A, 7.375%, 4/23/21 Italy 1,700,000   1,636,250  
senior secured note, first lien, 144A, 4.75%, 7/15/20 Italy 300,000   299,813  
        12,055,031  
Transportation 1.7%          
bFlorida East Coast Holdings Corp.,          
secured note, first lien, 144A, 6.75%, 5/01/19 United States 400,000   393,000  
senior note, 144A, 9.75%, 5/01/20 United States 200,000   175,000  
Hertz Corp., senior note,          
7.50%, 10/15/18 United States 600,000   612,750  
6.75%, 4/15/19 United States 1,000,000   1,025,000  
bStena AB, senior bond, 144A, 7.00%, 2/01/24 Sweden 300,000   263,250  
bStena International SA, secured bond, 144A, 5.75%, 3/01/24 Sweden 500,000   442,125  
        2,911,125  
Utilities 2.1%          
Calpine Corp.,          
senior bond, 5.75%, 1/15/25 United States 1,300,000   1,222,000  
b senior secured bond, first lien, 144A, 7.875%, 1/15/23 United States 354,000   377,453  
bInterGen NV, secured bond, 144A, 7.00%, 6/30/23 Netherlands 1,000,000   835,000  
NRG Yield Operating LLC, senior bond, 5.375%, 8/15/24 United States 600,000   546,900  
bPPL Energy Supply LLC, senior bond, 144A, 6.50%, 6/01/25 United States 400,000   342,500  
b,dTexas Competitive Eletric Holdings Co. LLC/Texas Competitive Eletric Holdings          
Finance Inc., senior secured note, first lien, 144A, 11.50%, 10/01/20 United States 700,000   248,500  
        3,572,353  
Total Corporate Bonds (Cost $169,137,393)       148,981,171  
gSenior Floating Rate Interests (Cost $765,495) 0.4%          
Household & Personal Products 0.4%          
Sun Products Corp., Tranche B Term Loan, 5.50%, 3/23/20 United States 770,664   736,625  
    Shares      
Escrows and Litigation Trusts (Cost $—) 0.0%          
a,iNewPage Corp., Litigation Trust United States 1,200,000    
Total Investments before Short Term Investments (Cost $218,189,685)       229,530,239  
Short Term Investments (Cost $1,932,702) 1.1%          
Money Market Funds 1.1%          
a,jInstitutional Fiduciary Trust Money Market Portfolio United States 1,932,702   1,932,702  
Total Investments (Cost $220,122,387) 134.2%       231,462,941  
Notes Payable (34.8)%       (60,000,000 )
 
Other Assets, less Liabilities 0.6%       956,337  
Net Assets 100.0%     $ 172,419,278  

 

* The principal amount is stated in U.S. dollars unless otherwise indicated.
a Non-income producing.
b Security was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers
or in a public offering registered under the Securities Act of 1933. These securities have been deemed liquid under guidelines approved by the Fund's Board of Trustees. At
November 30, 2015, the aggregate value of these securities was $70,984,563, representing 41.17% of net assets.
c Perpetual security with no stated maturity date.
d Defaulted security or security for which income has been deemed uncollectible.
e A portion or all of the security purchased on a when-issued or delayed delivery basis.
f Principal amount is stated in 1,000 Units.


 

Franklin Universal Trust

Statement of Investments, November 30, 2015 (unaudited) (continued)

g The coupon rate shown represents the rate at period end.
h Income may be received in additional securities and/or cash.
i Security has been deemed illiquid because it may not be able to be sold within seven days.
j See Note 4 regarding investments in affiliated management investment companies.

ADR - American Depositary Receipt
FRN - Floating Rate Note
PIK - Payment-In-Kind

 

ABBREVIATIONS

Selected Portfolio


 

Franklin Universal Trust

Notes to Statement of Investments (unaudited)

1. ORGANIZATION

Franklin Universal Trust (Fund) is registered under the Investment Company Act of 1940 as a closed-end management investment company and applies the specialized accounting and reporting guidance in U.S. Generally Accepted Accounting Principles.

2. FINANCIAL INSTRUMENT VALUATION

The Fund's investments in financial instruments are carried at fair value daily. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. The Fund calculates the net asset value (NAV) per share as of 4 p.m. Eastern time each day the New York Stock Exchange (NYSE) is open for trading. Senior Fixed Rate Notes are carried at cost. Under compliance policies and procedures approved by the Fund’s Board of Trustees (the Board), the Fund’s administrator has responsibility for oversight of valuation, including leading the cross-functional Valuation and Liquidity Oversight Committee (VLOC). The VLOC provides administration and oversight of the Fund's valuation policies and procedures, which are approved annually by the Board. Among other things, these procedures allow the Fund to utilize independent pricing services, quotations from securities and financial instrument dealers, and other market sources to determine fair value.

Equity securities listed on an exchange or on the NASDAQ National Market System are valued at the last quoted sale price or the official closing price of the day, respectively. Foreign equity securities are valued as of the close of trading on the foreign stock exchange on which the security is primarily traded or as of 4 p.m. Eastern time, whichever is earlier. The value is then converted into its U.S. dollar equivalent at the foreign exchange rate in effect at 4 p.m. Eastern time on the day that the value of the security is determined. Over-the-counter (OTC) securities are valued within the range of the most recent quoted bid and ask prices. Securities that trade in multiple markets or on multiple exchanges are valued according to the broadest and most representative market. Certain equity securities are valued based upon fundamental characteristics or relationships to similar securities.

Debt securities generally trade in the OTC market rather than on a securities exchange. The Fund's pricing services use multiple valuation techniques to determine fair value. In instances where sufficient market activity exists, the pricing services may utilize a market-based approach through which quotes from market makers are used to determine fair value. In instances where sufficient market activity may not exist or is limited, the pricing services also utilize proprietary valuation models which may consider market characteristics such as benchmark yield curves, credit spreads, estimated default rates, anticipated market interest rate volatility, coupon rates, anticipated timing of principal repayments, underlying collateral, and other unique security features in order to estimate the relevant cash flows, which are then discounted to calculate the fair value. Securities denominated in a foreign currency are converted into their U.S. dollar equivalent at the foreign exchange rate in effect at 4 p.m. Eastern time on the date that the values of the foreign debt securities are determined.

Investments in open-end mutual funds are valued at the closing NAV.

The Fund has procedures to determine the fair value of financial instruments for which market prices are not reliable or readily available. Under these procedures, the VLOC convenes on a regular basis to review such financial instruments and considers a number of factors, including significant unobservable valuation inputs, when arriving at fair value. The VLOC primarily employs a market-based approach which may use related or comparable assets or liabilities, recent transactions, market multiples, book values, and other


 

relevant information for the investment to determine the fair value of the investment. An income-based valuation approach may also be used in which the anticipated future cash flows of the investment are discounted to calculate fair value. Discounts may also be applied due to the nature or duration of any restrictions on the disposition of the investments. Due to the inherent uncertainty of valuations of such investments, the fair values may differ significantly from the values that would have been used had an active market existed. The VLOC employs various methods for calibrating these valuation approaches including a regular review of key inputs and assumptions, transactional back-testing or disposition analysis, and reviews of any related market activity.

Trading in securities on foreign securities stock exchanges and OTC markets may be completed before 4 p.m. Eastern time. In addition, trading in certain foreign markets may not take place on every NYSE business day. Occasionally, events occur between the time at which trading in a foreign security is completed and the close of the NYSE that might call into question the reliability of the value of a portfolio security held by the Fund. As a result, differences may arise between the value of the Fund’s portfolio securities as determined at the foreign market close and the latest indications of value at the close of the NYSE. In order to minimize the potential for these differences, the VLOC monitors price movements following the close of trading in foreign stock markets through a series of country specific market proxies (such as baskets of American Depositary Receipts, futures contracts and exchange traded funds). These price movements are measured against established trigger thresholds for each specific market proxy to assist in determining if an event has occurred that may call into question the reliability of the values of the foreign securities held by the Fund. If such an event occurs, the securities may be valued using fair value procedures, which may include the use of independent pricing services.

When the last day of the reporting period is a non-business day, certain foreign markets may be open on those days that the NYSE is closed, which could result in differences between the value of the Fund’s portfolio securities on the last business day and the last calendar day of the reporting period. Any significant security valuation changes due to an open foreign market are adjusted and reflected by the Fund for financial reporting purposes.

3. INCOME TAXES

At November 30, 2015, the cost of investments and net unrealized appreciation (depreciation) for income tax purposes were as follows:

Cost of investments $ 220,443,537  
 
Unrealized appreciation $ 37,146,841  
Unrealized depreciation   (26,127,437 )
Net unrealized appreciation (depreciation) $ 11,019,404  

 

4. INVESTMENTS IN AFFILIATED MANAGEMENT INVESTMENT COMPANIES

The Fund invests in an affiliated management investment company for purposes other than exercising a controlling influence over the management or policies. Management fees paid by the Fund are waived on assets invested in the affiliated management investment company, in an amount not to exceed the management and administrative fees paid directly or indirectly by each affiliate. Prior to September 1, 2013, the waiver was accounted for as a reduction to management fees.

                      % of Affiliated Fund  
  Number of Shares       Number of Shares   Value at       Shares Outstanding  
  Held at Beginning Gross Gross   Held at End of   End of   Investment Realized Held at End of  
  of Period Additions Reductions   Period   Period   Income Gain (Loss) Period  
Non-Controlled Affiliates                        
Institutional Fiduciary Trust Money Market Portfolio 1,958,705 7,879,602 (7,905,605 ) 1,932,702 $ 1,932,702 $ - $ - 0.01 %

 


 

5. FAIR VALUE MEASUREMENTS

The Fund follows a fair value hierarchy that distinguishes between market data obtained from independent sources (observable inputs) and the Fund’s own market assumptions (unobservable inputs). These inputs are used in determining the value of the Fund’s financial instruments and are summarized in the following fair value hierarchy:

  • Level 1 – quoted prices in active markets for identical financial instruments
  • Level 2 – other significant observable inputs (including quoted prices for similar financial instruments, interest rates, prepayment speed, credit risk, etc.)
  • Level 3 – significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of financial instruments)

The input levels are not necessarily an indication of the risk or liquidity associated with financial instruments at that level.

For movements between the levels within the fair value hierarchy, the Fund has adopted a policy of recognizing the transfers as of the date of the underlying event which caused the movement.

A summary of inputs used as of November 30, 2015, in valuing the Fund’s assets carried at fair value, is as follows:

    Level 1   Level 2   Level 3     Total
Assets:                  
      Investments in Securities:                  
  Equity Investments:a                  
   Transportation $ - $ 296,638 $ -   $ 296,638
           Other Equity Investmentsb   79,515,805   -   -     79,515,805
Corporate Bonds   -   148,981,171   -     148,981,171
Senior Floating Rate Interests   -   736,625   -     736,625
Escrows and Litigation Trusts   -   -   - c   -
Short Term Investments   1,932,702   -   -     1,932,702
Total Investments in Securities $ 81,448,507 $ 150,014,434 $ -   $ 231,462,941

 

aIncludes common and convertible preferred stocks.

bFor detailed categories, see the accompanying Statement of Investments.

cIncludes security determined to have no value at November 30, 2015.

A reconciliation of assets in which Level 3 inputs are used in determining fair value is presented when there are significant Level 3 financial instruments at the end of the period.

6. SUBSEQUENT EVENTS

The Fund has evaluated subsequent events through the issuance of the Statement of Investments and determined that no events have occurred that require disclosure.

For additional information on the Fund's significant accounting policies, please refer to the Fund's most recent semiannual or annual shareholder report.


 

 

Item 2. Controls and Procedures.

 

(a) Evaluation of Disclosure Controls and Procedures.  The Registrant maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Registrant’s filings under the Securities Exchange Act of 1934 and the Investment Company Act of 1940 is recorded, processed, summarized and reported within the periods specified in the rules and forms of the Securities and Exchange Commission.  Such information is accumulated and communicated to the Registrant’s management, including its principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.  The Registrant’s management, including the principal executive officer and the principal financial officer, recognizes that any set of controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

 

Within 90 days prior to the filing date of this Quarterly Schedule of Portfolio Holdings on Form N-Q, the Registrant had carried out an evaluation, under the supervision and with the participation of the Registrant’s management, including the Registrant’s principal executive officer and the Registrant’s principal financial officer, of the effectiveness of the design and operation of the Registrant’s disclosure controls and procedures.  Based on such evaluation, the Registrant’s principal executive officer and principal financial officer concluded that the Registrant’s disclosure controls and procedures are effective.

 

(b) Changes in Internal Controls.  There have been no changes in the Registrant’s internal controls or in other factors that could materially affect the internal controls over financial reporting subsequent to the date of their evaluation in connection with the preparation of this Quarterly Schedule of Portfolio Holdings on Form N-Q.

 

 

Item 3. Exhibits.

 

(a) Certification pursuant to Section 30a-2 under the Investment Company Act of 1940 of Laura F. Fergerson, Chief Executive Officer - Finance and Administration, and Gaston Gardey, Chief Financial Officer and Chief Accounting Officer.

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

Franklin Universal Trust

 

 

 

By /s/ Laura F. Fergerson

      Laura F. Fergerson

      Chief Executive Officer –

      Finance and Administration

Date  January 26, 2016

 


 

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 

 

 

By /s/ Laura F. Fergerson

      Laura F. Fergerson

      Chief Executive Officer –

      Finance and Administration

Date  January 26, 2016

 

 

 

By /s/ Gaston Gardey

      Gaston Gardey

      Chief Financial Officer and

Chief Accounting Officer

Date January 26, 2016